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The international sanctions regime against the Democratic People’s Republic of Korea (North Korea, DPRK) is the strongest and most comprehensive set of sanctions currently in effect against any one country. It is composed of United Nations Security Council sanctions, ‘autonomous’ European Union (EU) sanctions and unilateral sanctions imposed by a host of other states including, most notably, the United States. The sanctions regime aims not only to halt the nuclear weapon and ballistic missile programmes of North Korea but also to stop its human rights violations and cyberattacks. The autonomous sanctions imposed by the EU go beyond the UN sanctions and constitute a crucial element of the sanctions regime. However, despite the broad scope of its sanctions, the size of its economy and its aspirations to project influence in North East Asia, the EU has had little impact on developments on the Korean peninsula.
Nevertheless recent events could present an opening for a stronger EU role. While its contours remain unclear, US President-elect Joe Biden’s policy towards North Korea is likely to differ significantly from the approach of the previous administration and could, for example, seek to draw on EU technical expertise and diplomatic facilitation. Furthermore, the coronavirus disease 2019 (COVID-19) pandemic has brought renewed attention to the humanitarian impact of the sanctions on North Korea. The sanctions regime and, in particular, the secondary sanctions imposed by the USA, are frequently criticized for exacerbating the dire humanitarian situation because they impede humanitarian action. These developments indicate both a need and an opportunity for the EU to reassess its sanctions policy towards North Korea and its broader strategy in North East Asia.
This backgrounder examines the EU’s autonomous sanctions on North Korea in the context of the wider sanctions regime. The recommendations aim to help strengthen the EU’s influence on developments in North Korea and improve compliance with sanctions while reducing their humanitarian impact.
The complex sanctions regime against North Korea
Following the first explosion of a nuclear weapon by North Korea in 2006, the UN Security Council issued—and has regularly expanded—a set of sanctions to compel North Korea to cease such activities and abandon its nuclear and ballistic missile programmes (see table 1). The initial UN Security Council Resolution 1718 established a sanctions committee (1718 Committee) and a Panel of Experts (POE) to oversee and advise on the sanctions measures. The EU has consistently transposed the UN sanctions and has also imposed autonomous sanctions (since 2006) and designations of persons and entities (since 2009), primarily to reinforce and complement the UN sanctions (see figure 1). In addition to these multilateral sanctions, the USA and other countries—including Australia, Canada, China, Japan, the Netherlands, New Zealand, Russia, Singapore, South Korea and Switzerland—have each issued unilateral restrictive measures against North Korea. The US sanctions regime in particular has moved beyond the scope of UN sanctions, by, for example, increasingly designating entities outside of North Korea and specifically impeding financial and banking services.
The European Union’s strategy of ‘critical engagement’ with North Korea
Since 1995, the official EU strategy towards North Korea has been one of ‘critical engagement’, combining sanctions with humanitarian aid and political dialogue. However, neither of these measures has led to significant progress on halting or dismantling the North Korean nuclear weapon and missile programmes or on its human rights violations. Meanwhile, EU–North Korea political dialogue has been suspended since 2015 and the EU has often been sidelined in negotiations, most recently during the inter-Korean rapprochement and the USA–North Korea summitry in 2018–19. While the EU has not been a major security actor in North East Asia, there are nevertheless important EU security interests at play. North Korean nuclear weapon and missile activities are a serious concern for Europe as they continue to undermine the global nuclear non-proliferation regime and threaten to further destabilize volatile regions, such as the Middle East, where North Korea is known to have transferred missile technology in the past.
The EU’s implementation of the UN sanctions regime and its willingness to go beyond it by imposing autonomous sanctions has been the central policy tool deployed in pursuit of its strategy—alongside actions on human rights issues. However, declining economic relations between the EU and North Korea (see figure 2) limit the leverage of possible sanctions relief and the prospect of investment that the EU could bring to negotiations with North Korea. Nevertheless, the EU’s diplomatic relations with North Korea, and particularly those of several EU member states, such as Sweden, Norway and Germany, which have in the past or more recently played a role as facilitators of dialogue, provide a solid foundation for a more proactive diplomatic role in the future.
The effectiveness of European Union and United Nations sanctions
Overall, the international sanctions regime has had a severe effect on North Korea’s economic activities and its ability to trade with other countries. Despite the ongoing sanctions breaches by some states and the focus of North Korean policies on establishing self-sufficiency, the sanctions continue to be a major constraining factor on North Korean economic development. Nevertheless, the sanctions regime has been unable to stop North Korea in its quest to establish itself as a de facto nuclear weapon state, as demonstrated by the six nuclear test explosions that North Korea has conducted, and the apparent advances in its missile programme, the explosive yield of its weapons and the miniaturization of its nuclear warheads.
Measuring the distinct impact of autonomous EU sanctions, as opposed to the wider international sanctions regime, is very difficult. As noted above, the EU’s sanctions are envisioned to be paired with diplomatic engagement and humanitarian aid. However, the EU has been unable to play the diplomatic role that it claims for itself and has had little opportunity to use its sanctions as leverage. Sanctions relief has been considered as a possible concession in return for steps towards denuclearization, including during the inter-Korean rapprochement and USA–North Korea summitry. But it is unlikely that the EU’s autonomous sanctions have such a distinct impact on or value to North Korea that they would guarantee a significant role for the EU in future negotiations. Instead, they compound the pressure of the international sanctions regime and probably have limited bargaining value on their own.
The humanitarian impact of the sanctions regime
The Resident Coordinator of the UN in the DPRK and the Humanitarian Country Team estimate that in 2020 there are 10.4 million ‘people in need’ in North Korea. These North Koreans are facing particular hardship with regard to food security, nutrition, health, water, sanitation and hygiene. Considering the comprehensiveness and sustained imposition of the sanctions regime, there is little doubt that it has had a considerable impact on the economic situation and access to goods—for example agricultural machinery and fertilizer components. However, it is difficult to specifically quantify the humanitarian impact of sanctions, let alone distinguish the particular impact of the autonomous sanctions imposed by the EU. Anecdotal evidence—in this case derived from interviews with representatives of humanitarian aid organizations and sanctions practitioners—is helpful to identify and illustrate the impact of North Korean domestic policies and the impact of sanctions on humanitarian aid provision.
Impact of domestic policies on the humanitarian situation in North Korea
The combination of sanctions with factors such as internal North Korean policies exacerbates the humanitarian needs and economic hardship experienced by many North Koreans and adds to the problems facing humanitarian organizations. The allocation of resources by the North Korean regime often favours selected elites, the armed forces and the nuclear and ballistic missile programmes—instead of the general population. In addition, many of the restrictions imposed on foreign aid organizations and diplomats significantly impede their ability to procure, deliver and monitor the provision of humanitarian aid. Currently, foreign staff of humanitarian organizations are prohibited from accessing the country beyond the capital of Pyongyang. Humanitarian aid shipments are also subject to special measures and waiting periods upon arrival in North Korea, often leaving humanitarian goods, such as medicines and vaccination stocks, stranded at the border or in customs.
The COVID-19 pandemic has intensified these problems. While official sources have denied the existence of cases of infections and deaths, unofficial sources and media have questioned these claims, citing large-scale quarantines and other indicators. North Korea reacted quickly to the outbreak in China by closing its borders and later imposed restrictions on movement of its diplomats abroad and international personnel within the DPRK. The ongoing border closures have significantly reduced trade and other commercial activities, negatively affecting the economy and the livelihoods of many North Koreans.
Impact of sanctions on the ability to provide humanitarian aid to North Koreans
The sanctions on transfers of goods commonly part of humanitarian assistance and on banking services constrain the work of humanitarian organizations. This is exacerbated by the COVID-19 pandemic, which has limited their access to North Korea even further. According to the latest UN POE report, ‘[d]iplomatic missions, UN humanitarian agencies and non-governmental organizations are unable to bring in staff’. At the same time, as staff rotate out of North Korea they cannot be replaced. The limited presence of humanitarian organizations and diplomats and the inability of those present to move freely within the country make it difficult to gain insights into the situation and assess humanitarian needs. These challenges also reduce the capacity of organizations to ensure that humanitarian goods reach the desired recipients and are not diverted. Under these circumstances, several aid organizations, such as Finnish Fida International, have ceased or suspended their activities in North Korea. While donations and in-kind contributions to humanitarian assistance to North Koreans have been declining since the mid-2000s—including from the EU (see figure 3)—aid organizations are worried that the lack of in-country monitoring of the distribution of assistance could further decrease the willingness of donors to provide funding.
One significant improvement since the onset of the COVID-19 pandemic has been the acceleration of the approval process for exemptions from UN sanctions for humanitarian assistance related transfers by the 1718 Committee. However, humanitarian organizations continue to struggle to procure humanitarian goods and finance activities in North Korea, partly due to the absence of a banking channel.
Another issue that hinders the procurement and provision of appropriate humanitarian goods is the strongly risk-averse behaviour (also referred to as ‘overcompliance’ or ‘de-risking’) of most large and international companies towards any business related to North Korea. The risk of inadvertently incurring fines or reputational damage, combined with limited profitability, leads many companies to avoid any engagement in trade linked to North Korea. While from a compliance perspective this behaviour is laudable, it affects the ability of aid organizations to procure humanitarian goods (either at all or of suitable quality) and ignores the fact that exemptions for such goods apply and are generally granted.
Additional guidance, for example on how to use exemption procedures, could be provided to companies and humanitarian organizations to help to reduce these effects. The European Commission already provides such guidance materials with respect to Iran, Syria and Venezuela, which could easily be expanded. The EU could also facilitate engagement and reassure important suppliers, for example in the medical and pharmaceutical sectors.
Ways forward for the European Union’s sanctions policy towards North Korea
Advance non-proliferation and disarmament objectives
There is no realistic expectation that the lifting of sanctions alone could provide sufficient leverage to compel North Korea to abandon its entire nuclear programme. Instead, sanctions relief would need to be part of a more fundamental and comprehensive arrangement that changes the security situation for North Korea and guarantees regime survival. Nevertheless, there are a number of examples of concessions that were negotiated through various channels in the past that led to temporary measures and stabilization of volatile situations. Specific steps—such as the dismantlement of the nuclear facilities at Yongbyon in return for sanctions relief—have at times been at the centre of negotiations. Therefore, it is in the EU’s interest to identify intermediate steps and goals that could alleviate at least some of the destabilizing impacts of North Korea’s behaviour, increase transparency and reduce horizontal proliferation (to other states), using EU leverage and multilateral negotiations.
Reconsider European Union strategy for diplomatic engagement and political dialogue
The EU should reconsider its lack of willingness to engage diplomatically and in political dialogue, if it wishes to play a stronger role in future negotiations and further establish itself as a credible security actor in North East Asia. Following the breakdown of negotiations after the second USA–North Korea summit in Hanoi in February 2019, there may be an opening for the EU and some EU member states to assume the role of facilitator, party and guarantor of negotiations and agreements. Existing European diplomatic channels and informal Track 1.5 initiatives could play a key role in facilitating USA–North Korea dialogue in the light of a new US administration that may have a more restrained policy towards North Korea but a stronger interest in identifying substantive steps, building on technical expertise.
Improve sanctions implementation and counter sanctions evasion
The continuous expansion of sanctions by states also requires the allocation of appropriate resources and capacities to implement them. The implementation of sanctions in an effective and responsible way requires (a) the development of appropriate capacities for investigation and enforcement, (b) the allocation of sufficient resources to coordination and outreach to industry, financial institutions and humanitarian organizations, and (c) the application of exemption procedures in a timely manner. Raising awareness and improving capacities in relevant sectors can be an inclusive way to engage stakeholders, learn from their experiences and strengthen compliance while avoiding overcompliance. The new Enforcement Coordination Mechanism that will probably be established—to support intra-EU exchange of information and direct cooperation on enforcement—pursuant to the recast of the EU Dual-use Regulation could provide an opportunity to improve coordination on enforcement measures at the EU level.
Improve guidance on and channels for legitimate uses of humanitarian exemptions
It is imperative for EU member states to work with humanitarian aid organizations to ensure compliance with sanctions while limiting the impact on their work and facilitating applications for exemptions from the 1718 Committee. Pursuing a dual-track policy of providing humanitarian aid and imposing autonomous sanctions demands coordination and information sharing between officials in both policy areas and third parties, such as aid organizations with a presence on the ground. This can both inform the sanctions policymaking process and provide valuable insights on needs, diversion risks and best practices. The EU Directorate-General for International Cooperation and Development (DG DEVCO) organized a meeting between aid organizations active in North Korea and EU officials in 2018. According to a representative of a humanitarian aid organization, this was welcomed as an important opportunity to share experiences, challenges and good practices. This could be a model for regular meetings of this nature, potentially even with participation beyond the EU.
The following recommendations are specific actions the EU could take to move forward based on the four key policy directions outlined above:
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